When you have a dedicated server, it means you are renting one physical server from a hosting company. You can have full control (called "root" permissions in Linux) if you want it. With a dedicated server, you don't have to worry about other websites on a shared server taking up your resources and slowing your website down. A dedicated server is generally the highest level of server you would need if your online business grows into a presence that is getting a lot of website traffic. While the costs of a dedicated server are significantly higher than shared hosting, your business will be at a point that can easily afford the necessary costs of having your own server.
Dedicated hosting is used to describe web hosting packages that provide a dedicated server with dedicated resources to a single client. Dedicated hosting plans are ideal for WordPress websites with very large number of visitors. Many WordPress hosting service providers offer Dedicated Hosting plans along with shared and VPS hosting plans.
For example, in a shared hosting plan, a client is sharing a computer with many other clients. In the case of a VPS hosting plan the clients are sharing a machine but not the resources with other clients on the same computer. However, on dedicated hosting plans a client leases a whole server with all of its resources. Web hosting companies offer different packages of dedicated hosting plans. Prices of theses plans are based on the clients choice of hardware and resource allocation.
Dedicated hosting plans are ideal for large organizations or websites with much higher traffic. The clients get full control of the server which allows them to configure it to meet their own needs. The dedicated plans also come in managed and unmanaged forms where the hosting center can manage the server for the client in case of any problems. Dedicated Managed servers are generally more expensive. The pricing is also influenced by the amount of resources needed such as bandwidth, storage space, and amount of RAM, amongst other things.
Additional expenses for dedicated servers also include the software packages needed to run the server. Such software can include licensing for Windows, if desired, cPanel, if desired, and other paid software. Free alternatives to most of the paid software packages are available but are not generally preferred due to issues with stability of the software. The main exception to the preference for paid vs free software is the widespread use of Linux over Microsoft or other paid OS on servers.